2020 has been an interesting year for all of us, to put it lightly. We know that many people with The Leaders Group have been impacted directly by this year’s pandemic, whether it involved hospital stays, a slowdown in business, or both. Please know that we are here to support you. This has also been a year where we have all learned to adapt – sometimes at a breakneck pace – to handle business in ways we never thought possible. For every story I have heard about the negative business impacts of COVID, I have heard another one about somebody who is finding more opportunities to get in front of their clients as a result of the rapid digital transformation we have experienced. While none of us would elect to experience 2020 again, I truly believe we will all come out stronger on the other side. 
 
From a Leaders Group standpoint, 2020 has been a bit of a mixed bag. As a whole, we are doing better financially than we have in prior years, even with the heavy investment in technology earlier this spring. This is going to be a record year for us, due almost entirely to the efforts of all of you. On the flip side, as many of you are aware, my father and our founder, Dave Wickersham, passed away at the end of September. I have been trying to focus on the positive that he had worked so hard to ensure our team was ready for his eventual departure, but it would be an understatement to say that it has been a huge emotional loss for The Leaders Group family and the broader insurance and financial services industries. Thank you again to everyone that has reached out and/or made donations in his name; my mom and I truly appreciate the outpouring of support we have received. 
 
I have been focused on the positives of this year from a business standpoint, and I do want you all to know that we have built an awesome team here that is working with me to ensure that we stick to preserving Dave’s vision for the company. Of course, first and foremost, at the top of our minds is Dave’s motto that doing the right thing is always the right thing, and this will continue to be our guiding principle. With that in mind, at the end of the day, our business is built on three core pillars, and I would like all of you to hold us personally accountable if you find that we are not living up to any one of them. These pillars are: a high standard of customer service and everything this entails including the personal relationships we have built with our representatives and our knowledge of the industry; second is business friendly compliance that will not only keep all of us out of trouble but will help you find answers that aren’t just “no;” third is a dedication to technology and other tools to help you grow your businesses. All three of these pieces are part of the continued focus for 2021. 
 
Thank you for your support through this year and your continued partnership. With vaccines being distributed as I write this, I am filled with hope that there is light at the end of the tunnel and that we are approaching an end to the economic disruptions that have marked this year. All of us here at The Leaders Group look forward to continuing to serve you and wish you a happy and successful 2021. 

Sean Wickersham, President & Chief Marketing Officer

Socially Responsible Investing (SRI) sounds so right, what could possibly be wrong with it? SRI is a strategy that strives to generate ethical change and also financial returns for an investor. There are numerous proponents to this strategy and even professional designation programs incorporating it. Many investors are interested in investments that make an impact and want a company’s environmental, social, and governance (ESG) factors to be considered when investing. 

Many investors feel strongly that they want these strategies used, but regulators have justified concerns about ESG choices. The SEC Asset Management Advisory Committee’s ESG sub-committee wants to improve the data and disclosure used for ESG investments to create more transparency for investors and better verifiability of investment products’ ESG strategies and practices. The Department of Labor finalized a rule requiring plan fiduciaries to focus solely on the plan’s financial risks and returns and keep the interests of plan participants and beneficiaries paramount when making decisions on investments and investment courses of action. That means that the financial professional may not recommend ESG funds at this point in time in retirement plans. 

Financial professionals must keep in mind emotions versus returns when considering socially responsible investments. Is the client willing to sacrifice value for values? What screening factors should be used? Consider positive versus negative factors, such as sustainable products or diverse management and board of directors, versus no investments in tobacco or non-renewable energy companies. Thematic investing would include companies that use all recyclable packaging or other social issues. If a client requests such investments, sufficient disclosure must be given so clients understand that they may sacrifice returns or increase expenses by using these investment strategies. 

Asset managers like BlackRock, Fidelity and Vanguard say ESG funds perform better over the long term, but the evidence is spotty. A Pacific Research Institute study last year found that the S&P 500 outperformed a broad basket of ESG funds over a decade by nearly 44%.¹ 

There are a number of ways to take an ESG-style investing approach, including ETFs that track indices, as well as specialty funds that do not include stocks related to polarizing areas of the market such as tobacco and fossil fuels. 

The Leaders Group does not take one side or another, as it should be an investor’s choice if it is important to them. In the near future, The Leaders Group will have disclosure requirements that outline the potential financial risks and the transparency issues of Socially Responsible Investment strategies. In the interim, resources are available in the LEADERSlink libraries under the tag #ESG. 

^[1] Labor vs. the ESG Racket – https://www.wsj.com/articles/labor-vs-the-esg-racket-11605482618

Jane Riley, Chief Compliance Officer

The year is finally over, so we applaud your success. We’ve all adapted, created new ways of doing things, and have been there for each other like never before. 2020 has been a year no one could have predicted – a global pandemic, social unrest, devastating natural disasters, a contentious election cycle, market gyrations of every kind, and lastly, the passing of Dave Wickersham. As we take time to celebrate this holiday season, we know your commitment to your clients is unwavering, and we’re dedicated to supporting you in that effort. 
 
It’s struck me since March that constraints often drive creativity, and we’ve shown that at every turn. As your success continues, this hasn’t surprised any of us at The Leaders Group. It is what you deliver day in and day out, in good times and bad, that brings new business your way. With our service, business-friendly compliance, and technology stack as job one, we look forward to working alongside you as you continue to grow, compete, and succeed. 
 
By harnessing the power of LEADERSlink over these past four years, it has helped to significantly reduce and even eliminate duplication in turn causing fewer delays with our already refined new accounts workflow. That’s the reason we are here today – to remind you of the efficiencies available. 
 
Here’s a highlight of our client management and business submission tech stack available within LEADERSlink: 
You can update existing client records by submitting a ‘Client Update’ through the Compliance Approvals tab. Any change can be made to more than 20+ years’ worth of records within the database. While this process won’t instantaneously update your client’s information, it will notify the Accounts Management team of the information that should be changed. 

Submitting a ‘Books and Records’ request (BRD for short) is the place you electronically upload copies of our paperwork as well as product sponsor paperwork for compliance review instead of sending hard copies via email, fax, or regular mail to our home office. 

A ‘trade blotter’ should be created whenever you want to send an application, check, transfer form, product sponsor request, or any other type of documentation somewhere. The trade blotter helps us and anyone in your office to keep track of items.

 Laser App fills your financial industry forms for you, saving you tremendous amounts of time processing paperwork. With over 70 integrations included, DocuSign, and 33,000+ forms in their library, they collect the most financial industry forms and fill them out automatically with more client data than any other system. 

For additional information on the client management and business submission tools available within LEADERSlink, please visit our knowledge base center, Leaders Group University. 
 
This year has tested all of us in new ways. Times like these have a way of shining a light on the blessings in our individual lives and allow us to focus on what matters most. Thank you for your business, and the trust you place in The Leaders Group. We look forward to 2021 with great optimism. 
 
All my best, 

David Francis, Principal Operations Officer 

What a challenging year! We know that you have faced struggles personally and professionally that you couldn’t see coming. For The Leaders Group, we’ve had a record year financially but have suffered a massive loss with the loss of founder and CEO Dave Wickersham. Dave was a great man, father, mentor, leader, and had an excellent reputation in the industry. He’ll be missed by so many. 

2020 was full of changes. Like many, we also adjusted to remote working, video calls, and juggling a more challenging work/life balance where it’s not always clear whether we are working from home or living at work. I think we’re all ready to put 2020 behind us, but it’s important to remember that turning over the calendar doesn’t solve all our problems. 

2020 has shown us once again that the market is not the economy. While we’ve had one of the most challenging years in our economy since the great recession, markets have performed relatively well as of the time of writing this.¹ Even with a contested election and a politically divided country, the markets have fared well since the election. It seems as though the positive vaccine news and the likelihood of a divided government have helped markets stay relatively stable since early November.² Economic news hasn’t been as good this year. Unemployment spiked at 14.7% back in April with the expectation that it would stay above 10% through the end of the year. The annualized GDP loss in Q2 was 32.9%. While the unemployment rate is well under the initial expectations for year-end, we still have over 10 million fewer jobs than before the pandemic, and many have dropped out of the workforce.³ 

Despite initial unemployment claims rising in early December, we have many good things to look forward to in 2021. There is an expectation that we’ll see more federal stimulus before year-end and potentially again once the new administration takes over.⁴ We will most likely have multiple effective vaccines to choose from in 2021, with a rollout to the broad population sometime in the spring; this should help things get back to normal as we move through 2021. Effective vaccine distribution will likely bolster expectations of 2021 GDP, raising consumer confidence and increasing hiring across many sectors that have been negatively impacted by the COVID recession. 

Significant hurdles we’ll have to clear in order to get an idea of what to expect in 2021 likely occur early in the first quarter. The results of the Georgia runoff election have the potential to move markets in early January. Increased unemployment benefits and the eviction moratorium expire later this month unless a federal stimulus package addresses this.⁵ As I write this, congressional leaders have just agreed on a $900 billion stimulus package that includes additional unemployment benefits, rental assistance, another round of PPP loans, and a $600 per person stimulus check for most Americans. Economists have often described this as a K-Shaped recovery – meaning some have fared very well during the pandemic while others are falling further behind. We saw this juxtaposition earlier this year when the DJIA cracked the 30,000 mark, and extremely long lines for food pantries made national headlines on the same day.⁶ It’s important to remember that lingering high unemployment has the potential to negatively affect all industries over time while also causing intense suffering for those families trying to scrape by. 

Many of our problems will be helped by an effective vaccine and, just as important, an effective distribution plan. Surveys show that there will be vaccine hesitation throughout many parts of the U.S.⁷ It’s important that we have several vaccines cleared so that we can have something available to all areas of the country, including those where the Pfizer vaccine is not as practical. If we can manage to do this, everyone that is willing to get a vaccine should have access. This will hopefully stop the virus in its tracks and get us back on a path to normalcy. As we see some of the year’s uncertainties going away, I would expect to see volatility in the markets decrease as 2021 moves forward. 

Thank you again for sticking with The Leaders Group through this challenging year. We look forward to a day where we can hold in-person meetings and see everyone. Have a happy New Year! 

Ben Tiller, Principal Financial Officer

---

^[1] Contributor editor@etftrends.com (ETF Trends) ETF Trends. (2020, December 12). Markets at record highs despite COVID-19 surge. Retrieved December 18, 2020, from https://www.nasdaq.com/articles/markets-at-record-highs-despite-covid-19-surge-2020-12-12

^[2] Winck, B. (2020, November 5). Why the stock market is loving the prospect of a divided government. Retrieved December 18, 2020, from https://markets.businessinsider.com/news/stocks/stock-market-analysis-divided-government-best-outcome-investors-stimulus-elections-2020-11-1029771646

^[3] Hess, A. (2020, December 8). The U.S. still has 10 million fewer jobs now than before the pandemic. Retrieved December 18, 2020, from https://www.cnbc.com/2020/12/08/the-us-has-10-million-fewer-jobs-now-than-before-the-pandemic.html

^[4] Sherman, J., & Everett, B. (2020, December 16). Congressional leaders near deal on Covid relief. Retrieved December 18, 2020, from https://www.politico.com/news/2020/12/16/congress-deal-covid-relief-446244

[5]Nova, A. (2020, December 10). Next stimulus package may include eviction moratorium and $25 billion in rental assistance. Retrieved December 18, 2020, from https://www.cnbc.com/2020/12/09/next-stimulus-bill-may-include-eviction-moratorium.html

^[6] Vandenberge, J. (2020, November 25). The Dow hit a record high. So did the Greater Cleveland Food Bank. Retrieved December 18, 2020, from https://www.news5cleveland.com/news/local-news/cleveland-metro/the-dow-hit-a-record-high-so-did-the-greater-cleveland-food-bank

^[7] Elliott, P. (2020, December 04). We Almost Have a Vaccine. Not Enough People Want It. Retrieved December 18, 2020, from https://time.com/5918040/coronavirus-vaccine-hesitancy/